What Went Wrong: How the 1% Hijacked the American Middle Class . . . and What Other Countries Got Right

The American economy has experienced considerable growth in the last 30 years. But virtually none of this growth has trickled down to the average American. Incomes have been flat since 1985. Inequality has grown, and social mobility has dropped dramatically. Equally troubling, these policies

Overview

Something has gone seriously wrong with the American economy.

The American economy has experienced considerable growth in the last 30 years. But virtually none of this growth has trickled down to the average American. Incomes have been flat since 1985. Inequality has grown, and social mobility has dropped dramatically. Equally troubling, these policies have been devastating to both American productivity and our long-term competitiveness.

Many reasons for these failures have been proposed. Globalization. Union greed. Outsourcing.

But none of these explanations can address the harsh truth that many countries around the world are dramatically outperforming the U.S. in delivering broad middle-class prosperity. And this is despite the fact that these countries are more exposed than America to outsourcing and globalization and have much higher levels of union membership.

In What Went Wrong, George R. Tyler, a veteran of the World Bank and the Treasury Department, takes the reader through an objective and data-rich examination of the American experience over the last 30 years. He provides a fascinating comparison between the America and the experience of the “family capitalism” countries: Australia, Austria, Belgium, Denmark, France, Germany, the Netherlands, and Sweden.

Over the last 30 years, they have outperformed the U.S. economy by the only metric that really mattersdelivering better lives for their citizens. The policies adopted by the family capitalist countries aren’t socialist or foreign. They are the same policies that made the U.S. economy of the 1950s and 1960s the strongest in the world.

What Went Wrong describes exactly what went wrong with the American economy, how countries around the world have avoided these problems, and what we need to do to get back on the right track.

Editorial Reviews

Publishers Weekly

In his first book, Tyler, a former Clinton administration deputy assistant Treasury secretary, slams popular acquiescence to low wages, imperious CEOs, and diminished national net worth. He contrasts the pursuit abroad of “family capitalism”—a doctrine of healthy compensation, job retraining, and productivity growth—with the increasing income disparities in the U.S. that destroy economic mobility and perpetuate poverty. Tyler identifies the Reagan era and its free-market dogma as the beginning of the reversal of middle-class growth, but sees little change since then. He argues that a first step toward recovery would be to boost the wages of lower-income households; he cites Australia and Europe as examples showing that prosperity and living wages are complementary, not contradictory. Whatever the merits of his proposals, the array of data he presents justifies popular apprehension about America’s future. The key issue is not big government vs. small government, he maintains, but rather the distribution of wealth. While Tyler’s recommendations seem hard to achieve, he provokes outrage with his impassioned portrait of an America where job security is a relic of the past. Agent: Howard Yoon, Ross Agency. (July)

From the Publisher

“Tyler explodes numerous myths... Controversial but well-grounded in data and fact. Anyone with an interest in economic policy ought to have a look."Kirkus Reviews

“[Tyler] provokes outrage with his impassioned portrait of an America where job security is a relic of the past.”Publishers Weekly

"Tyler’s timely and convincing book confirms what Americans feel in their bones: the economy is rigged against them and something is definitely wrong."Library Journal

“Several books have examined the effects of the recent recession, but few have dug as deeply into the root causes of [our] country’s current economic malaise as George R. Tyler’s What Went Wrong... Though his conclusions are undoubtedly controversial, Tyler grounds his arguments in data and facts, providing a deep exploration of our current economic situation and the pre-Reagan policies that, if implemented again, may lead us out.”Shelf Awareness

Kirkus Reviews

Blame it all on Ronald Reagan--every damn bit of misery and immiseration that has befallen the middle and lower classes in the past three decades. That's the thunder-stealing takeaway of former Treasury Department assistant secretary and World Bank executive Tyler's book. The author charts how a period of unprecedented growth, prosperity and widespread wealth-sharing was derailed under the Reagan administration and continues to careen off the track all these years later. So profound were the changes wrought by privatization and the looting of the public sector that Tyler calls the entire period after 1980 the "Reagan Era"--and he does not mean it as a compliment. According to the author, drawing on thorough economic analysis, "only 5 percent of earners enjoyed income gains exceeding inflation during the Reagan Era, and most of that was concentrated in the earnings of the top 1 percent." Throughout, Tyler explodes numerous myths, though readers will have to know the depth of those myths in order to appreciate his efforts. He observes, for instance, that von Hayek and Keynes, who should be presumed to be mortal enemies, admired each other greatly (and "both men would have been dismayed by the behavior of Ronald Reagan overtly crafting routine, large structural deficits merely to lower taxes on the wealthy"). Demolishing a libertarian plank, the author argues persuasively that there is no real relationship between the minimum wage and unemployment--no reason, in other words, not to pay American workers a living wage. Yet so American workers are paid, with the result that they are ever poorer--and, Tyler argues, "poverty is understated." He recommends a radical overhaul of tax and fiscal systems to follow the model of such nations as Switzerland and Australia. Controversial, of course, but well-grounded in data and fact. Anyone with an interest in economic policy ought to have a look.

Library Journal

★ 09/15/2013Economist Tyler (former Clinton administration deputy asst. Treasury secretary and World Bank advisor) claims that over the last 30 years, productivity and corporate profits have soared in the United States while income levels have stagnated or fallen. To explain why, Tyler compares American "shareholder capitalism" to the "family capitalism" practiced in Australia and Northern Europe, which focuses on increasing the long-term value of businesses for their shareholders and employees. In the post-World War II economic boom (1945–80), a period the author labels the Golden Age, there was an implicit social contract in the United States by which government policy, management, and organized labor worked together to link higher profits and rising productivity with increased wages to ensure that all Americans benefited. Since 1980, Tyler writes, this social contract has been shredded; U.S. politicians and businesses have harmed the population with benefit cuts, deregulation, wage givebacks, and tax policies that transfer wealth from the middle class to the top one percent. VERDICT Tyler's timely and convincing book confirms what Americans feel in their bones: the economy is rigged against them and something is definitely wrong.—Duncan Stewart, Univ. of Iowa Libs., Iowa City

Meet the Author

George R. Tyler has a diverse background,drawing on his broad experiences at the highest levels of government, at the World Bank, in the private sector, and in the international nonprofit sector for What Went Wrong. Trained as an economist, Tyler served on the staffs of senators Hubert H. Humphrey and Lloyd Bentsen early in his career and was appointed by President Bill Clinton in 1993 as a deputy assistant treasury secretary. He subsequently served as counselor at the World Bank which marked the beginning of his international career.

Tyler has expansive private sector experience as founder and CEO of a real estate investment and development firm, creating a number of resort residential and residential subdivisions in Virginia, a role he continues to play. He gained international experience from heavy involvement in the global nonprofit sector, where his important familiarity with the European corporate culture occurred. In 1999, Tyler was co-author of the concept paper adopted by Paris-based Doctors Without Borders (MSF) to develop a medical research capability for diseases of the developing world neglected by the global pharmaceutical industry. The not-for-profit entity is called the Drugs for Neglected Diseases Initiative. As a founding consultant to MSF, Tyler was a member of the Working Group. He subsequently served on the DNDI Audit Committee overseeing budget and other issues.

Customer Reviews

Most Helpful Customer Reviews

What Went Wrong: How the 1% Hijacked the American Middle Class . . . and What Other Countries Got Right 4.4 out of 5based on
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5 reviews.

Anonymous

More than 1 year ago

Definitely recommend this book. The author has a commanding knowledge of the recent global economic landscape. For anyone who wants to understand where we are financially, and how we got here, this is a welcome entry into the literature. We owe George Tyler thanks for making the subject matter accessible even to the novices among us, not least with diagrams and charts that are clear and to the point. Tyler's bibliography is exhaustive. I've already given this book to three friends in the business world, all of whom praise it for its clarity and comprehensiveness.

Anonymous

More than 1 year ago

A MUST read for anyone interested in economics, wages or why family
incomes have stagnates.
A stunning book.
Tyler's book is the most absorbing and best-written review in decades of the
current state of American capitalism - as revolutionary for American
audiences in some ways as Adam Smith's Wealth of Nations. I find myself
still returning to the ideas it presents because it has so completely
reoriented my perspective on economics.
It will almost certainly disturb your sleep and I'm a Washington attorney who needs her sleep.
Four distinguishing features:
1. New information about contemporary capitalism models in other
affluent nations, including Australia and northern Europe. American firms
paying $10-$20 an hour more to European employees than American employees?
Australians and northern Europeans love globalization? Productivity in the
low countries higher than in America? Everyone gets real wage gains year
after year in Australia while 1 percent do in America? European firms
routinely out-managing and out-investing American firms? Wal-Mart chased
from Germany after losing $5 billion for refusing to pay higher wages.
This information is simply startling and until now was only known to a
handful of Americans - some scholars plus the management ranks of US
multinationals. They know how the Australians and northern Europeans have
kept wages rising in step with productivity, most citizens profiting from
globalization - unlike America.2. The quality of the writing. Understated and well explained to the
nonexpert, but compelling and rich with facts and quotes from the best
economic minds of the last half century. I am not an economist and I got
it!
2. The quality of the writing. Understated and well explained to the
non-expert, but compelling and rich with facts and quotes from the best
economic minds of the last half century. I am not an economist and I got
it!
3. Perspective shaping. After Tyler's book, you will forever read
about economics from a far different perspective than you now do. The real
world - where families abroad receive regular real income gains and firms
are well-managed for the long term - is revealed to you by Tyler. And it is
entirely different from what you think or from America now.
4. How to make things right: its greatest strength is the lessons laid
out in detail about how the American economy can be reformed. Those
sympathetic to relinking family incomes to productivity growth now come to
the fray unarmed. You can't beat something with nothing, and this is the
first book to provide practical and realistic solutions drawn from across
the globe to redress the laissez faire implosion of the American middle
class.
You owe it to your children to read Tyler, but be warned: you won't be able
to stop thinking about this compelling book afterward.

Azalynn

More than 1 year ago

Great read.

Anonymous

More than 1 year ago

What Went Wrong is a shining example of how to explain economics to someone who doesn't really get it. I felt like Tyler was in my living room, talking to me, describing all of the reasons why our economy has devolved. In amazing detail, the shortcomings of national products like Apple and Snapple are outlined. The house bubble - another mystery to me - takes on new meaning. Triple W is well worth the read.

CENY

More than 1 year ago

This book is a lengthy diatribe against Ronald Reagan. It's intellectually sloppy since it blames Reagan for everything that has gone wrong with the US economy since 1973. For example, it blames Reagan for allowing CEO pay to rise dramatically...on the same page as a chart showing that the sharpest growth in CEO pay was during the mid- to late-1990s, under the Clinton administration (and the author worked in the Clinton administration). It also describes the years from WWII until 1973 (justifiably) very positively in terms of the economy, and claims that &quot;Voters ended it all in 1980&quot;. (The economy was in the tank for years before Ronald Reagan- that's largely why he was elected, and troubles had started in the 1970s.) The book is also full of self-righteous quotes from northern Europeans and others about how their economies are better than ours.
This book could be a very useful evaluation of policy choices that other countries have made that led to their middle classes doing better than ours. Perhaps the author will delete the 90% of the book that consists of anti-Reagan diatribes and publish a second edition that will do just that.